Heavily regulated and process oriented industries such as oil, food, beverage, chemicals, cosmetics and pharmaceuticals share a number of common characteristics: they are highly regulated; their content is either dynamically changing or very complex; they are subject to large fines for non-compliance; they are heavily process oriented; they require extensive record keeping; they have complex order tracking; they require indirect goods/input goods; and they have low visibility of process inputs. Currently there are no broad web-based solutions that fully meet needs of record keeping in process management of heavily regulated industries. In fact, many of the record keeping functions and filing processes for federal and state regulations still occur through outdated manual time-consuming means.
As an example, compliance in the wine industry begins as soon as the grapes reach the winery. This necessitates wineries to track where the grapes were grown, how they were shipped to the winery and the tonnage used throughout production, bottling and aging. This process can go on for many years. In addition, alcohol content during fermentation and the bottling/aging process must be tracked. Since a winery's ability to comply with the multitude of regulations hinges on capturing specific information throughout the continuous production process which is also tied to inventory, it is integral that compliance be tied into the winery's supply chain management.
This above problems are primarily due to the lack of industry-specific solutions that integrate regulatory compliance with inventory management. As a result, the production process is fragmented, labor intensive, inefficient, and expensive—resulting in a very high cost of goods sold, (averaging about 50-80% of net revenues) and high general and administrative costs (averaging 10-35% of net revenues). Regulatory compliance issues and the in-process inventory in the wine industry create a need for tailored supply chain solutions.
Wineries today also have limited visibility into their internal operations, with little real-time information of their wine in process inventory levels. The wine making side of the industry often lacks the ability to report how many bottles of a certain type of wine that they have in their cellar. They also find it difficult to match production levels with inventory needs, resulting in inefficient buying. Bulk wine supply is also difficult to manage.
Wineries often enjoy preferred supplier relationships formed by verbal agreements with favorable pricing terms. However, they seldom have centralized or consolidated purchasing among their subsidiaries resulting in varying pricing agreements. They regard their ingredients, supplier lists, and their recipes as proprietary information requiring high levels of security. Also, wineries have limited technology staff, thus requiring greater external hands-on support.
Known DOS/PC based products that focus on one particular need of the wine industry do not address the problems described above. Known systems: lack total supply chain management solutions; do not provide complete regulation and tax compliance management; licensing on a per seat basis; and have limited ability to provide visibility into internal operations, in particular they lack real time accessibility to all employees of the company.
As a result of the above problems in the wine industry, everything from inventory management, regulatory and tax compliance, and order fulfillment on the supply side is fragmented both inside and outside the enterprise, labor intensive, inefficient, and expensive. Regulatory and tax compliance is manual, complex and time consuming; suppliers and buyers lack visibility; parent companies have little real time information on the buy and spend categories of their subsidiaries; and there is little coordination between supplier production and buyer demand. As a result of such problems, the cost of goods sold in the wine industry averages 50-80% of net revenues, and general and administrative costs are often as high as 10-35% of net revenues.